President's budget includes renewable energy

By Kris Bevill

Web exclusive posted Feb. 27, 2009, at 11:29 a.m. CST

The proposed U.S. government budget for fiscal year 2010 put forth by President Barack Obama contains an unprecedented spending total of $3.55 trillion, of which billions in new spending has been allocated for renewable fuels-related projects.

The following is a brief breakdown of proposed spending and budget cuts affecting the renewable fuels industry.

U.S. EPAObama's budget increases funding for the U.S. EPA to $10.5 billion, a 34 percent increase from the 2009 level. Obama plans to spend some of the money to develop two energy-related programs: a comprehensive energy and climate change plan and an emissions reduction program. The energy and climate change plan would identify ways to invest in clean energy, address global climate change and create new "green" jobs.

The economy-wide emissions program, essentially a cap-and-trade program, would require a reduction of greenhouse gases (GHG) to approximately 14 percent below 2005 levels by 2020. Revenue created through the program would be used to fund investments in "a clean energy future," according to the budget outline. Revenue is expected to begin being generated in fiscal year 2012 and is projected to total $150 billion over 10 years.

The EPA will also receive a $19 million increase in funding for work on GHG emission inventory and to work with industry sectors to report GHG emission data.

USDAEstimated allocations for the USDA increased slightly from $24.6 billion in 2009 to $26 billion in 2010. Including in the agriculture department funding is $250 million in loans and grant money for renewable fuel projects. The budget outline states that Obama is a strong proponent of American-made renewable fuels and the additional money provided in the 2010 budget will help rural areas to continue to lead the country in this sector.

Direct payments to farmers with sales revenues of more than $500,000 annually would be phased out over three years. According to the budget outline, "Large farmers are well positioned to replace those payments with alternate sources of income from emerging markets for environmental services, such as carbon sequestration, renewable energy production, and providing clean air, clean water and wildlife habitat."

U.S. DOEUnder the proposed budget, the DOE is allocated a total budget of $26.3 billion. Among its expected duties is the continued support for further research, development, demonstration and commercialization of biofuels and renewable energy by way of loan guarantees. Specific monetary totals were not supplied for the loan guarantee program.

A complete outline of Obama's proposed fiscal year 2010 budget can be viewed at www.omb.gov.